Rumors are pointing to a larger iPad (iPad Pro?) this year and an uncertain future for the iPad Mini. The Mini was only given a minor update (essentially Touch ID and a new gold color option) last Fall while the larger Air received a full spec update and slimmer design. The Mini is being squeezed between larger iPhones and the technically superior iPad Air 2. The iPad Mini 3 (or 2) is still an attractive option for people that want a small tablet, but I believe there are less of those people than there were in 2012 when the Mini debuted. Furthermore, the $100 difference between the Air 2 and Mini 3 isn't as much of a value as it was a year ago and there isn't much room to lower the price further because the Mini's margins are already tight.
Tablet sales are flat overall, and the same is true of the iPad. Tablets under 8" make up approximately 50% of the tablet market, at least partially due to their lower cost. Perhaps larger phones is dragging down sales of small tablets. If so, it seems plausible that Apple would try to reinvigorate the iPad lineup with a larger model targeted at professionals and creatives with new features such as split screen multitasking and new input methods. Smartphones are getting bigger, why not tablets too? Just a year or two ago a 12-13" iPad would have been too heavy and bulky to hold for extended use, but after seeing the Air and Air 2 a larger model seems possible.

So, where does that leave the Mini - will it die or evolve? I've always been curious about using the Air suffix in the naming of the iPad. Was it a familiar name used to make it distinct from the Mini? Or was it carefully planned years in advance of a shakeup in the iPad lineup? It just doesn't make much sense to me for the Air be the largest iPad. If Apple does launch a larger and more capable iPad Pro, would they keep or discontinue the Mini? There is another option I see: resize the Air to about 9" (keeping the screen resolution the same), splitting the difference between the 8" Mini and original 10" iPad size and discontinue the Mini. I think the new 9" Air would be a nice compromise of portability and utility, while filling a nice space between large phones and an iPad Pro or MacBook. This would also allow Apple to maintain their pricing convention while getting rid of the low-margin Mini.